There are a number of tax incentive retirement plan options for taxpayers who wish to put aside money for their retirement years. Many employers provide qualified plans, such as 401(k) plans and the equivalent 403(b) plans, for employees of public schools and tax-exempt organizations. Generally, the contribution limits to these plans are the same, and the maximum is $15,500 ($20,500 age 50 and over) for 2007. These plans are generally perceived as tax-sheltered, which means the contribution is not currently included in income, earnings are tax-deferred, and the distributions from the accounts at retirement will be fully taxable. But did you know that it might be possible to designate those contributions to be Roth-type contributions that are not
currently tax-sheltered and will provide tax-free income at retirement? Not all employers offer the Roth version of 401(k) and 403(b) plans, so you will need to check with your employer. Which type of plan is best suited for you depends upon whether you can afford to pay the tax on the contribution now and what your tax rate will be when you ultimately retire.
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Medical expenses are deductible can only to the extent that, in total, they exceed 7.5% of Adjusted Gross Income the IRS and court decisions have expanded the definition of medical costs that can he deducted from personal income taxes. Plan ahead to take advantage of as many medical expenses as possible. Medical deductions can be taken for the costs of diagnosis, the treatment or prevention of a disease or for affecting any structure or function of the body.
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